Midwest Weekly: PADD 2 Tumbles on C2 Start, Election Rout


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) - Buckeye Complex CBOB plunged 17% during the week ended 
November 6 as the winter C2 scheduling cycle erased physical premiums across 
the board in Midwest fuels, which were also hit by a futures selloff triggered 
by the outcome of the U.S. midterm elections.

   Unwinding across PADD 2 fuels was unanimous for the week. Every market in 
conventional gasoline blendstock for oxygenate blending (CBOB) had double-digit 
losses. Components of ultra-low sulfur diesel (ULSD) averaged a drop of nearly 
10%. Chicago jet fuel had the smallest decline, at just under 6%.

   "With refining capacity increasing into November, buyers simply backed off 
physical bids as the new scheduling cycle got underway," a Midwest fuels trader 
said, referring to the situation with CBOB as Thursday marked the start of the 
10-day C2 cycle for gasoline November. Characterized by high-RVP winter-spec 
fuel availability and expanding regional refining runs, the C2 drove buyers 
away from spot procurement.

   Buckeye CBOB tumbled 55.48cts, or 17.46%, on the week to average $2.6234 
gallon, DTN spot pricing data showed.

   Wolverine CBOB dropped 54.48cts, or 16.97%, to an average of $2.6654 gallon, 
while Chicago CBOB fell 50.04cts, or 16.25%, to average $2.5794 gallon.

   In the Midcontinent, Group 3 CBOB, known as "V", dropped 45.13cts, or 
14.62%, to average $2.6359 gallon.

   On the distillates front, Buckeye ULSD dropped 49.16cts, or 9.75%, to 
average $4.5493 gallon, while Wolverine ULSD fell 45.56cts, or 8.81%, to 
$4.7153 gallon. In Chicago, ULSD dropped 48.87cts, or 9.86%, to average $4.4705 
gallon.

   In the Midcontinent, Group 3 ULSD, known as "X", fell 44.51cts, or 9.16%, to 
average $4.4133 gallon.

   Among aviation fuels, Group 3 jet fuel, or "Q", dropped 48.66cts, or 9.68%, 
to average $4.5383 gallon, while Chicago jet fuel slipped 25.87cts, or 5.69%, 
to average $4.2913 gallon.

   The collapse in Midwest fuels developed alongside the futures sell-off on 
NYMEX, where WTI crude plunged 13% on the week, while RBOB slid 12% and ULSD 8%.

   Futures tumbled after Democrat rivals to U.S. President Donald Trump secured 
majorities in the House of Representatives and Senate in Tuesday's midterm 
elections, raising market expectations of a de-escalation in the Iran war that 
has seized up global petroleum supplies.

   On the refinery front, no major outages or operational disruptions were 
reported across the Midwest for the week.

   As of Wednesday (11/4), the U.S. Energy Information Administration (EIA) 
reported that for the week ended October 30, regional refinery utilization rate 
had advanced by 4.8 percentage points from the week earlier to 92.9%. That 
comfortably exceeded the year-ago rate of 83.1%.

   Distillate stocks drew by 1.4 million bbl to stand at 22.8 million bbl as of 
October 30, down from the prior week's 24.2 million bbl, the EIA said. 
Historical data showed it to be the lowest regional distillate volume logged 
since November 21, 2014, when stocks stood at 21.900 million bbl.

   Motor gasoline inventories remained unchanged during the week ended October 
30 at an all-time record low of 41.0 million bbl, matching the week-ago level. 
Year-on-year, regional gasoline inventories were 1.5 million bbl lower.

    




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